The Financial Times reports that the Federal Housing Finance Agency (regulator for Fannie Mae and Freddie Mac) has blocked the Obama administration’s hoped-for program that would reduce the principal amount on mortgages worth more than the underlying homes. It was hoped that the proposed program would serve to reduce defaults and foreclosures; however, the FHFA has determined that the costs of implementation as well as less than complete take-up by potential program participants will likely result in additional costs to taxpayers. Treasury secretary Tim Geithner has criticized the FHFA’s decision and urged reconsideration.
Unfortunately, this isn’t good news for homeowners who are under water on what they owe to banks like Bank of America, J.P. Morgan Chase & Co., and Wells Fargo & Co. It means that if you have been waiting for a chance at a principal reduction through this program, you will have to wait longer for a program that may never be implemented. This is bad news for families and individuals that are in need of help now because they fell behind on mortgage payments during tough times or are having trouble paying their mortgage.
If you are behind on your mortgage payments or failing to pay other bills in order to make your mortgage payments every month, we think you would benefit from a discussion with the attorneys at Abelmann Law. Please give us a call or email to schedule a free consultation.